If establishing a trust is part of your estate plan, it is important to reflect on you and your family’s needs and to consider your options carefully when selecting a trustee.
Naming a corporate trustee to serve as trustee or co-trustee often provides more client protections than utilizing a sole individual trustee. An individual trustee might not always have the time, expertise, or resources to fully administer a trust, and many individual trustees are forced to hire expensive outside managers and administrators to handle the workload. Unlike an individual trustee, corporate trustees are monitored by independent and government entities and must maintain detailed records. This oversight promotes effective implementation of processes, procedures, and compliance with applicable regulations.
A corporate trustee like Cumberland Trust operates as a “directed trustee,” allowing the grantor or the beneficiaries to use their preferred financial advisor to handle the investment management of the trust’s liquid assets. Utilizing a directed trustee eliminates the inherent conflict of interest that can exist when a trustee also manages the assets of the trust. Under this model, financial advisory firms add an additional layer of safeguards to trust accounts by overseeing invested assets and account activity.
It is also important to note that individual trustees might not have fiduciary or trustee insurance coverage. A mistake made by an inexperienced individual trustee can end up costing thousands of dollars. Corporate trustees have preventative systems in place to minimize or avoid potential liability, but should the need arise, insurance helps protect the company from loss.
The impartiality of a corporate trustee provides an additional benefit to clients. A corporate trustee remains unbiased, helping your family maintain harmony through different life stages or after the loss of a loved one. Because of the emotional stress families may go through during life changes or loss, even the most stable and close-knit families can experience discord and tension. Often, having a neutral third-party trustee or executor on the team prevents disagreements and discord among family members. By appointing a corporate trustee to serve alongside an individual as co-trustees, the family maintains a role in the trust management, providing a means for family input while the corporate co-trustee provides technical expertise.
Comparative to an individual trustee who may become incapable of serving or unwilling to serve, a corporate trustee offers the continuity and consistency needed to preserve and honor your family’s legacy. When Cumberland Trust joins a client’s trust team, not only are we determined to uphold that family’s values, but we also offer the consistent administration beneficiaries need. Where an individual trustee may be unable or unwilling to serve at full capacity, a corporate trustee or co-trustee can offer the stability that your family deserves.
Whatever your goals, Cumberland Trust’s dedicated professionals are committed to providing you and your family with the expertise, unbiased support, and consistency you deserve. We are uniquely positioned to help you preserve and protect your family’s wealth and legacy for future generations.